Tennessee Small Business Protection Act

This Act will:

Raise $100 - $200 million in additional revenue for Tennessee
Provides for "combined reporting," a comprehensive solution to this "Las Vegas Loophole"
Allows TN to receive tax revenues on a fair proportion the companies' revenues
Reduces the state sales tax rate on grocery food by 1% and leaves the local option unaffected

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Tennessee Small Business Protection Act (SB1614/HB1914)

Sponsored by Senator Marrero and Representative Stewart

Tennessee’s business tax laws allow multistate companies to avoid taxes by setting up sham subsidiaries in Delaware or Nevada to transfer ownership of their real estate or trademarks and logos. They then deduct their payments to their own subsidiaries from their Tennessee income, thus avoiding TN taxes. The bill:

Provides for “Combined Reporting,” a comprehensive solution to this “Las Vegas loophole”.
Allows TN to receive tax revenues on a fair proportion of the companies’ revenues.
Reduces the state sales tax rate on grocery food by 1% and leaves the local option unaffected.

Impact: The bill levels the playing field for Tennessee small businesses that pay TN taxes. More than half of the states use combined reporting. It’s time for Tennessee to join the majority.